Inflammatory changes associated with periarticular pure gold bead implants were studied in dogs involved in a clinical trial investigating motor dysfunction and chronic pain owing to hip joint dysplasia and osteoarthritis. Gold beads were percutaneously implanted via a needle into different locations surrounding the greater trochanter of the femur. Nine dogs with implants were necropsied. In all examined animals, characteristic histologic lesions were observed in the tissue surrounding the gold implants--namely, a fibrous capsule composed of concentric fibroblasts intermixed with a variable number of inflammatory cells and a paucicellular innermost layer of collagen with a few fibrocyte-like cells in empty lacunae. Lymphocytes dominated the inflammatory infiltrate, with rarely observed macrophages present in close proximity to the implant site. No giant cells were observed. Immunohistochemistry showed mixed populations of lymphocytes, both CD3 positive (T cells) and CD79a positive (B cells), which in some cases formed lymphoid follicles. Diffuse inflammatory changes were present to a minor extent in the perimysium and surrounding fascia. The inflammation observed in dogs is similar to that observed with gold implants in humans. It is possible that the clinically beneficial effect of gold beads for chronic osteoarthritis depends on sustained localized inflammation with localized release of soluble mediators. The encapsulation of the implant by a paucicellular and poorly vascularized fibrous capsule may help prevent an exaggerated inflammatory reaction by sequestering the gold bead from the surrounding tissue.